With airline capacity continuing to rise, airfares are forecast increase moderately across most regions globally in 2025, according to American Express Global Business Travel’s (Amex GBT) latest Air Monitor 2025.
The report predicts some welcome stabilization after a period of sharp fluctuations, marking a shift from the more volatile pricing patterns of recent years. However, despite these stabilizations, the underlying cost of air travel is likely to remain high.
Amex GBT identified several key factors influencing airfare pricing, including the growing trend of dynamic pricing, which allows airlines to adjust fares based on market conditions.
The integration of New Distribution Capability (NDC), is expected to impact corporate travel buyers as they navigate fare negotiations. Additionally, geopolitical tensions, which could affect fuel costs, and increased operating expenses, such as higher labour costs from new contracts and environmental surcharges, are all contributing to upward pressure on prices.
Amex GBT’s forecast indicates a year-over-year increase in business-class fares within North America, projected to rise by 2.7%. Similarly, Europe is expected to see a 1.2% rise in business-class prices. On the economy-class front, prices are forecasted to increase by 2.8% for both regions.
(photo courtesy of American Express Global Business Travel)
“In 2025, businesses will be faced with a new reality – even though price rises are leveling off and capacity has returned, fares remain high,” says Gerardo Tejado, SVP Professional Services, Amex GBT.
“Corporates should expect tough negotiating stances from airlines, particularly as carriers evolve their distribution models. Business travel buyers will need to be strategic – for example, around loyalty and program performance data – to get value in this environment.”
The use of artificial intelligence (AI) in air travel pricing is another key development highlighted in the report.
Airlines are increasingly leveraging AI to sharpen their revenue management and retailing capabilities. The report references how AI technologies are reshaping air travel revenue strategies, allowing airlines to better respond to market shifts and consumer behaviour.
As airlines continue to innovate in their pricing strategies, the use of AI is expected to become an integral part of revenue management, making it even more important for corporate travel buyers to leverage program performance data and loyalty to navigate this new pricing environment effectively.
Some welcome stability is coming for airfares, but prices will still increase modestly. (Photo Credit: Amex GBT)
To sum up, the Amex GBT Air Monitor 2025 report paints a picture of continued evolution in the global air travel landscape, marked by modest fare increases in most regions, rising airline costs, and the rapid adoption of advanced pricing strategies, particularly through NDC and AI.
Amex GBT says the travel industry will need to stay informed about these trends to navigate the evolving market, while businesses will need to adopt strategic approaches to managing air travel costs effectively.
You can view the full report here.
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